Taxpayers are afforded an opportunity to request a hearing when they receive one of several collection notices, such as a Notice of Federal Tax Lien Filing or a Final Notice of Intent to Levy.
In general, a taxpayer has thirty (30) days to file a request for a Collection Due Process (CDP) hearing protesting the IRS’s collection action. The Collection Due Process hearing provides an opportunity to discuss the appropriateness of the lien or levy and whether alternative collection methods are available. The hearing process provides taxpayers with a level playing field and stops overly aggressive collection tactics by the IRS. A timely filed and properly formed request for a CDP hearing provides temporary relief from the IRS collection efforts in most cases, allowing the taxpayer time to resolve the matter voluntarily.
Making a Collection Due Process hearing request also extends the ten-year Statute of Limitations the IRS has to collect the tax, so it may not be right for all situations. If the thirty-day deadline to file a CDP hearing request is missed, other alternatives may be available to protest IRS collection action, such as a request for an Equivalent Hearing. However, in the case of an Equivalent Hearing, the IRS could still pursue the debt against the taxpayer while the taxpayer is waiting for the hearing. There also is no right to appeal the Equivalent Hearing decision to Tax Court.
We routinely represent taxpayers for their Collection Due Process Hearing, and often obtain a resolution to their matter through this process. Contact us to discuss whether you may be able to take advantage of CDP rights or an Equivalent Hearing.